The Laclede Group Performance Contingent Restricted Stock Award Agreement
Exhibit
10.9
The
Laclede Group
2006
Equity Incentive Plan
Performance
Contingent
THIS AGREEMENT, made as of this 5th day
of November 2008, between The Laclede Group, Inc. (the “Company”) and «Name»
(the “Participant”).
Pursuant to the terms of the Company’s
2006 Equity Incentive Plan, as approved by shareholders in January 2006, (the
“Plan”), this Award allows the Participant to earn up to
«Grant__High_Performance» shares of Common Stock conditioned upon the execution
and delivery by the Company and the Participant of this Agreement setting forth
the terms and conditions applicable to such award.
NOW, THEREFORE, in consideration of the
mutual covenants set forth in this Agreement, the parties hereto hereby agree as
follows:
1. Award of
Restricted Stock. Pursuant and subject to the terms and
conditions set forth herein and in the Plan, the Company awards to the
Participant, effective as of the Award Date, a maximum of
«Grant__High_Performance» («Spelled_Out») shares of Common Stock of the Company,
subject to the terms, conditions and restrictions described in this Agreement
and in the Plan (the “Performance Contingent Restricted Stock”). Of
the Performance Contingent Restricted Stock,
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«Grant__Target»
shares (“Performance Restricted Shares”) are issued on the Award Date and
Participant shall have all of the rights of a shareholder of the Company
with respect to such shares, including the right to vote and to receive
dividends, but such shares remain subject to the performance contingencies
in Section 5 and non-transferability restrictions in Section 7 of this
Agreement
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«Delta»
shares (“Potential Performance Restricted Shares”) represent shares, all
or some of which the Participant may earn if performance exceeds Target,
but as to which Participant shall have no rights of a
shareholder. Such rights shall only be obtained, if at all,
once performance during the Performance Period has exceeded Target, the
Board has certified to such attainment, and one or more Potential
Performance Restricted Shares are delivered to the
Participant.
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2. Award
Date. The Award Date of the Performance Contingent Restricted
Stock awarded under this Agreement is November 5, 2008.
3. Incorporation of
Plan. All terms, conditions and restrictions of the Plan are
incorporated herein and made part hereof as if stated herein. If
there is any conflict between the terms and conditions of the Plan and this
Agreement, the terms and conditions of the Plan, as interpreted by the
Administrator, shall govern. All capitalized terms used herein, but
not otherwise defined, shall have the meaning given to such terms in the
Plan.
4. Restrictions and
Conditions. Except as otherwise provided in this Agreement,
Participant shall forfeit any and all right to the Performance Contingent
Restricted Stock upon Participant’s termination of employment with the Company
and its subsidiaries for any reason prior to the end of the Performance
Period.
5. Lapse of
Restrictions. The Participant accepts this Performance
Contingent Restricted Stock Award and agrees that the restrictions relative to
such Award shall lapse only following the conclusion of the Performance Period
and only to the extent that one or more of the Performance Contingencies set
forth in Appendix A have been met or exceeded. If performance on
neither Performance Contingency has been achieved at or above Threshold, then
all Performance Contingent Restricted Stock is forfeited. If
performance on one or more of the Performance Contingencies has been achieved
between the Threshold and Target or Target and High Performance levels of
performance, the Administrator shall interpolate for performance between the
applicable levels and shall determine the number of shares of Performance
Contingent Restricted Stock as to which the restrictions shall
lapse. Because the Company cannot issue fractional shares, the
Administrator will round down to the nearest whole number of shares of
Performance Contingent Restricted Stock in such interpolations.
The Award will be subject to forfeiture
of up to 25% of the shares earned based upon performance relative to the
Performance Contingencies, as determined by the Administrator in its sole
discretion, if the Company’s Total Shareholder Return, as defined in Appendix A,
for the Performance Period is below the median relative to the defined
comparator group identified by the Administrator.
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Vesting of any Performance Restricted
Shares as well as the issuance, if any, of Potential Performance Restricted
Shares under this Agreement shall occur on the business day immediately
following the date of the certification by the Compensation Committee
(“Certification Date”) of (a) the satisfaction of one or more of the Performance
Contingencies and (b) the number of shares of Performance Contingent Restricted
Stock to be vested or issued; provided, that no Performance
Contingent Restricted Stock shall vest or be issued if Participant is terminated
with or without Cause or if the Participant voluntarily terminates employment
with the Company and all of its subsidiaries prior to the Certification
Date. Any Potential Performance Restricted Shares that the Committee
certifies are earned will be issued and delivered to the Participant in no event
later than March 15 of the year following the end of the Performance
Period. Any Performance Restricted Shares or Potential Performance
Restricted Shares as to which any or all of the respective Performance
Contingencies has not been satisfied shall be forfeited.
| Notwithstanding the foregoing, |
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(i)
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In
the event of a Change in Control, the Performance Contingent Restricted
Stock shall be deemed earned at Target prorated based on the number of
months in the Performance Period to the date of the Change in Control and
all restrictions as to such number of shares shall lapse if:
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(a)
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the Award has not otherwise been forfeited and |
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(b)
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the
successor or surviving corporation (or parent thereof) does not assume
this Award or replace it with a comparable award, provided further that if
the Award is assumed or replaced, such assumed or replaced Award shall
provide that the restrictions shall lapse if Participant is involuntarily
terminated without Cause within 24 months of the Change in Control (a
“Change in Control
Termination”);
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(ii)
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if
a Participant leaves the employment of the Company and its subsidiaries
due to death, Disability or retirement (including early retirement and
disability retirement) prior to the end of the Performance Period, the
Participant will be eligible to earn a prorated Award, as the
Administrator may determine, based on the number of full months as a
Participant during the Performance Period and will be eligible to receive
the underlying shares if the Performance Contingencies are satisfied and
the restrictions lapse as outlined
above.
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6. How Shares are
Held. The Performance Restricted Shares shall be held by a
Company custodian until all of the restrictions have lapsed and all applicable
terms and conditions have been met. The Company shall deliver to the
Participant the number of whole shares of Performance Restricted Shares as to
which the Administrator has determined the restrictions have lapsed as provided
in Section 5. Potential Performance Restricted Shares, when earned,
shall be issued and delivered as provided in Section 5.
7. Shares
Non-Transferable. The Performance Contingent Restricted Stock
shall not be transferable by Participant and may not be, sold, assigned,
disposed of, or pledged or hypothecated as collateral for a loan or as security
for performance of any obligation or for any other purpose until, with respect
to the Performance Restricted Shares, after the restrictions have lapsed as
provided in Section 5 and, with respect to the Potential Performance Restricted
Shares, after such shares have been issued and delivered to the
Participant.
8. No Right to
Continued Employment. Nothing in this Agreement shall confer
on the Participant any right to continuance of employment by the Company or a
subsidiary, nor shall it interfere in any way with the right of Participant’s
employer to terminate Participant’s employment at any time.
9. Tax Withholding
and Tax Election. The Company shall not be obligated to
deliver any shares of Performance Contingent Restricted Stock until Participant
pays to the Company in cash, or any other form of property acceptable to the
Company, the amount required to be withheld for any federal, state or local
income, FICA or other taxes of any kind with respect to such
shares. The Participant may, by notice to the Company, elect to have
such withholding satisfied by a reduction of the number of whole shares
otherwise so deliverable, such reduction to be calculated based on the Fair
Market Value of the Common Stock on the date the restrictions lapse as provided
in Section 5. The value of shares withheld will not exceed the
minimum amount of tax required to be withheld by law. The Company and
its subsidiaries shall, to the extent permitted by law, have the right to deduct
such taxes, from any payment of any kind otherwise due to
Participant. Until the restrictions have lapsed as provided in
Section 5, any dividends paid relative to the Performance Restricted Shares
shall be treated as compensation and subject to tax withholdings in accordance
with tax laws then in effect.
The Participant may, but is not
required to, elect to apply the rules of Section 83(b) of the Internal Revenue
Code, as amended, (“Code”) to the issuance of Performance Restricted Shares that
is subject to a substantial risk of forfeiture. If the Participant
makes an affirmative election under Section 83(b) of the Code, the Participant
must file such election within 30 days after the date of this Agreement with the
Internal Revenue Service and notify the Company within 30 days after making such
election. The decision to make an affirmative election under Section
83(b) of the Internal Revenue Code depends upon a wide variety of facts and
circumstances and as such the Participant should consult his or her tax
advisor. The Company will not provide guidance to Participants on
determining if an affirmative election is appropriate.
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10. Confidential
Information and Restrictions on Soliciting Employees. Notwithstanding any
provision of this Agreement to the contrary, the Participant shall pay to the
Company the Fair Market Value of the Performance Contingent Restricted Stock
vested and issued to Participant under this Award if, during the period
beginning on the date hereof and ending eighteen months following the date the
Participant’s employment with the Company and its subsidiaries terminates
(provided that such termination is other than a Change in Control Termination),
the Participant: (1) discloses Confidential Information, as defined below, to
any person not employed by the Company or any of its subsidiaries or not engaged
to render services to the Company or any of its subsidiaries; or (2) Solicits
Employees, as defined below. Fair Market Value shall be calculated on
the date of the first violation of this Section 10.
For purposes of this Section 10,
“Confidential Information” means information concerning the Company, its
subsidiaries and their business that is not generally known outside the Company,
and includes (A) trade secrets; (B) intellectual property;
(C) methods of operation and processes; (D) information regarding
present and/or future products, developments, processes and systems;
(E) information on customers or potential customers, including customers’
names, sales records, prices, and other terms of sales and cost information;
(F) personnel data; (G) business plans, marketing plans, financial
data and projections; and (H) information received in confidence from third
parties. This provision shall not preclude the Participant from use or
disclosure of information known generally to the public other than by his or her
disclosure of such information or of information not considered confidential by
persons engaged in the business conducted by the Company or subsidiary or from
disclosure required by law or court order.
“Solicits Employees” means the
Participant’s direct or indirect hire of, solicit to hire, or attempt to induce
(or Participant’s assisting of any third party to hire, solicit or attempt to
induce) any employee of the Company or a subsidiary (who is an employee of the
Company or a subsidiary as of the time of such hire or solicitation or attempt
to hire) or any former employee of the Company or a subsidiary (who was employed
by the Company or a subsidiary within the 12-month period immediately preceding
the date of such hire or solicitation or attempt to hire) to leave the
employment of the Company or a subsidiary.
11. Integration. This
Agreement, and the other documents referred to herein or delivered pursuant
hereto which form a part hereof, contain the entire understanding of the parties
with respect to its subject matter. There are no restrictions,
agreements, promises, representations, warranties, covenants or undertakings
with respect to the subject matter hereof other than those expressly set forth
herein. This Agreement, including without limitation the Plan,
supersedes all prior agreements and understandings between the parties with
respect to its subject matter and may only be amended by mutual written consent
of the parties.
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12. Governing
Law. This Agreement shall be governed by and construed and
enforced in accordance with the laws of the State of Missouri, without regard to
the provisions governing conflict of laws.
13. Compliance with
Laws and Regulations. The obligation
of the Company to deliver shares of Common Stock under this Award shall be
subject to all applicable federal and state laws, rules and regulations and to
such approvals by any government or regulatory agency as may be
required.
14. Participant
Acknowledgment. By accepting these Awards, the Participant
acknowledges receipt of a copy of the Plan, and acknowledges that all decisions,
determinations and interpretations of the Administrator in respect of the Plan
and this Agreement shall be final and conclusive.
In addition, the Participant expressly
acknowledges that violation by the Participant of Section 10 of this Agreement
will obligate the Participant to pay to the Company the Fair Market Value of the
Performance Contingent Restricted Stock that becomes vested or is issued
pursuant to Section 5.
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The
Laclede Group, Inc.
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By:
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X.X.
Xxxxxx
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Title:
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Chairman
of the Board, President and Chief
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Executive
Officer
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«Name»
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Appendix
A to Stock Award
Performance
Period. The “Performance Period” for this Award shall be the
period beginning October 1, 2008 and ending September 30, 2011.
Performance
Contingencies. The “Performance Contingencies” for this Award
include two performance measures: EPS Growth and Portfolio
Development as specified below:
EPS
Growth – EPS Growth is measured as the average of the annual earnings per
share of Common Stock for the Company’s fiscal years 2009, 2010 and
2011. The Threshold, Target, and High Performance levels of
performance and performance contingent restricted stock (PCRS) as to which
restrictions may lapse are as follows:
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Threshold
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Target
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High Performance
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Level
of Performance
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Average
of $ per share or above
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Average
of $ per share or above
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Average
of $ per share or above
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Number
of PCRS as to which restrictions lapse
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[1/3
of PCRS in grant x 80%]
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[2/3
of PCRS in grant x 80%]
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[#
of PCRS in grant x
80%]
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Portfolio
Development – Portfolio Development is measured by organic earnings
(other than Laclede Energy Resources or Laclede Gas Company) and/or investments
or acquisitions made in new businesses entered into within the Performance
Period. The Threshold, Target and High Performance levels of
performance and PCRS as to which restrictions may lapse are as
follows:
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Threshold
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Target
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High Performance
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Level
of Performance
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Investment
of $ million or earnings added of $ per
share or above
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Investment
of $ million or earnings added of $ per
share or above
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Investment
of $ million or earnings added of $ per
share or above
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Number
of PCRS as to which restrictions lapse
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[1/3
of PCRS in grant x 20%]
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[2/3
of PCRS in grant x 20%]
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[#
of PCRS in grant x
20%]
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Total
Shareholder Return for the Company or for a comparator company shall be
calculated as follows:
| Average share price for the 7/1/2011 – 9/30/2011 quarter | |
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+
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value of reinvested dividends |
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=
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Total end of performance period value |
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–
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average share price
for the 7/1/2008 – 9/30/2008 quarter
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=
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Total value created in performance period |
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÷
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average share price for the 7/1/2008 – 9/30/2008 quarter |
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=
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Total Shareholder Return |
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Illustration: If
a Participant received an award of 150 shares of Performance Contingent
Restricted Stock with 100 shares being Performance Restricted Shares and 50
shares being Potential Performance Restricted Shares and if the Administrator
determines that the Company attained Target Performance on the EPS Performance
Contingency, midway between Target and High Performance on the Portfolio
Development Performance Contingency, and TSR exceeded the median of the
comparator group, then upon the Committee’s certification of such performance
the 100 Performance Restricted Shares would vest and 5 shares of the 50
Potential Performance Restricted Shares would be issued and delivered to the
Participant.
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